One of the most vexing problems for Chicago and its teachers went virtually unmentioned during the strike: The pension fund is about to hit a wall.

The Chicago Teachers' Pension Fund has about $10 billion in assets, but is paying out more than $1 billion in benefits a year - much more than it has been taking in. That has forced it to sell investments, worth hundreds of millions of dollars a year, to pay retired teachers. Experts say the fund could collapse within a few years unless something is done.

"There's a huge crisis," said Laurence Msall, president of the Civic Federation, a nonpartisan research organization in Chicago that works on fiscal issues. "The problem does not get easier by waiting. The problem gets bigger, and starts to become an insurmountable obstacle."

Having skipped its pension contributions for many years, Chicago is supposed to start tripling them in another year under state law. But the school district has drained its reserves. And it cannot easily turn to the local taxpayers, because of a cap on property taxes. Borrowing the money would be difficult and expensive as well, because of a credit downgrade this summer. One of the few remaining choices would be to make deep cuts in other services.

Like Chicago, many cities and school districts now face pension pressure after reducing their contributions in recent years to save money. Among the funds for different types of workers, teachers' plans tend to be shortchanged more often, according to research done by the Center for Retirement Research at Boston College for The New York Times.

The reasons are unclear, but in many states - California, New Jersey, Rhode Island and Illinois, among others - pension contributions must be set by state legislators every year. And since teachers' pension costs are blended with other education spending, lawmakers sometimes decide to withhold money from pensions to allow more direct state spending on the schools. The teachers' pension fund for the State of Illinois is in even worse shape than the Chicago teachers' fund.

What many Chicago residents may not realize is that their school district also has been paying $130 million a year to cover most of the pension contributions required of the teachers, a practice known as a "pickup," which became a flash point last year in the collective bargaining battle in Wisconsin. Wisconsin's public workers have agreed to make their own contributions, as a concession.

Officials in Chicago know they have a pension problem, even though it was not front and center in the strike. Mayor Rahm Emanuel focused on trying to improve the quality of public education, with a longer school day and more meaningful teacher evaluations. The Chicago Teachers' Union, meanwhile, was intent on reinstating a 4 percent pay increase, and protecting those who are laid off when failing schools are closed.

Mr. Emanuel has made it clear that he wants to address teachers' pensions, too. Earlier this year, he tried to curb at least some of Chicago's ballooning costs by seeking to raise retirement ages, increase employee contributions and trim the 3 percent yearly pension increases that the city's retirees now receive. He called those increases "the single greatest threat to the retirement security of city employees," because they drain money from pension funds very quickly.

The State Legislature, whose approval is needed for such changes, has said pensions must wait until next year. But Mr. Emanuel says the system is broken and he is not willing to make any increased contributions until it has been fixed. The mayor said earlier this year that making the larger contributions would lead to "direct cuts in our classrooms."

"Those cuts mean the average class size will jump to approximately 55 students," he warned.

The teachers' union has criticized Chicago for failing to set aside enough money for the pensions, but it has reassured workers and retirees that their benefits are protected by the State Constitution and cannot be reduced. A state law bars strikes in Chicago over pension issues.

Retirees say they are dismayed at the way their fund has been neglected, though they generally say they believe their benefits are safe.

"In the State Constitution of Illinois, it says that once you receive a pension, it can never be changed to be lower," said Claire J. Murray, 69, who retired in 2002 with a pension of about $42,000 a year, based on 34 years as a teacher and middle-school counselor.

If the money in the fund ever ran out, "the State of Illinois would have to pay our pensions," she said. "We're not just a pension fund, we're part of the State Constitution."

Ms. Murray pointed out that teachers in Chicago, as in many cities, earned no Social Security credit for their years in the classroom. Their pension plan is intended to replace the federal benefit.

She also said it would be unfair to penalize retired teachers for the school district's failure to set aside enough money for their benefits.

"It's the Board of Education who kept on taking all these funding holidays," she said.

Indeed, the State Legislature granted the Chicago school district a break from its pension contributions, starting in 1995. Since then, the city has never contributed the required amount; for many years it put in nothing. All the while, the teachers' benefits kept building up.

Pension fund documents say the teachers continuously made their share of the contributions, 9 percent of each paycheck. But in fact, the teachers have been putting in just 2 percent of their pay, while the school district has been making up the rest of what is called the "employee contribution" every year. The practice began under an agreement reached in the early 1980s that was supposed to reduce future pay raises, keep money in the fund and take advantage of a federal tax break.

Such pickups were not widely known until Gov. Scott Walker of Wisconsin began his push to make public employees pay more for their benefits and to bar them from bargaining for anything other than base pay. Wisconsin law calls for public workers and their employers to split the cost of pension contributions, but in practice, state and local governments were picking up almost all of the employees' share. Local and state workers have contended that they sacrificed current pay increases and the pickup should not be considered a giveaway.

Chicago does not have the state's only pickup. While Illinois says that teachers outside Chicago send in 9.4 percent of every paycheck for the separate state fund, the state really pays most of that too.

Gov. Pat Quinn of Illinois and Mr. Emanuel have both called for public workers to increase the amounts they pay toward their pensions. Forcing the Chicago teachers to make their full contributions, of course, would erode much of the salary increases they fought for during the strike.---------------------------------PHOTO SIDEBAR: Claire J. Murray retired in 2002 with a pension of about $42,000 a year, based on 34 years as a teacher and middle-school counselor. Fabrizio Costantini for The New York Times---------------------------------PHOTO SIDEBAR: Teachers End Chicago Strike on Second Try (September 19, 2012)**********************************************-- Jerry P. BeckerDept. of Curriculum & InstructionSouthern Illinois University625 Wham DriveMail Code 4610Carbondale, IL 62901-4610Phone: (618) 453-4241 [O] (618) 457-8903 [H]Fax: (618) 453-4244E-mail: jbecker@siu.edu